Question:

What is a Fannie Mae home loan?

Answer:

Fannie Mae (a shorter name for the Federal National Mortgage Association, also abbreviated as FNMA) is a large secondary market mortgage player, established by the government in 1938. Fannie Mae's purpose is to facilitate money flow in the mortgage business ensuring that primary lenders will always have money to lend and thus allow many Americans a better opportunity to become homeowners.

Fannie Mae home loans are not issued directly to borrowers. Rather, the borrower has to contact a Fannie Mae approved lender who will assist them with the loan application process and perform the assessment of financial eligibility of the applicant. He will also help the borrower to select the most suitable Fannie Mae mortgage product from a large selection, following streamlined and clear loan application procedures. Once the lender has closed the loan, he may keep it in his own portfolio, or sell it to Fannie Mae, which is what usually happens.

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